Confidentiality issues

• Pages: 89-120

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CHAPTER IV

CONFIDENTIALITY ISSUES

A. Introduction

This Chapter discusses the issues inherent in the production of

confidential materials to state antitrust enforcers, the mechanisms

available to safeguard these materials, and the limitations of those

mechanisms.

An important component of antitrust practice with state attorneys

general is the exchange of relevant information, including documentary,

testimonial, and electronic materials. In many cases and for a variety of

reasons, this information will be closely guarded by the party asked to

produce it.

The participation of a state attorney general in an antitrust case or

investigation can heighten the defendant’s or subpoena recipient’s need

for confidential treatment of materials or other information demanded by

compulsory process. A state attorney general might have criminal as well

as civil enforcement authority, thus raising the defendant’s or

investigative target’s potential exposure from producing materials.

Further, most state attorneys general have extensive pre-complaint

subpoena power, generally in the form of civil investigative demands,

which might afford access to a broader range of materials and

information than is available through discovery in litigation. Being

accountable to their constituent public, however, state attorneys general

sometimes need to communicate the nature of their investigations,

notwithstanding the desire or need for confidentiality of the private

defendant or subpoena recipient. Finally, documents might prompt

investigations by other state agencies or federal agencies on unrelated,

non-antitrust issues.

While communication and cooperation among state and federal

antitrust enforcement agencies can heighten confidentiality concerns, the

efficiencies gained through joint investigations by multiple jurisdictions

often make the sharing of confidential materials beneficial for enforcers

and companies alike. To make joint investigations more efficient and

effective, the states have developed mechanisms to share investigative

materials on a confidential basis.

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Concerns over confidentiality add to the complexity of antitrust cases

and investigations that involve enforcers in multiple states. Differences,

even subtle ones, among the states’ statutory schemes and case law can

complicate the task of protecting the confidentiality of materials

produced in a multistate antitrust case or investigation. The differences

among state laws and practices on confidentiality drew comment in the

2007 report of the congressionally mandated Antitrust Modernization

Commission. The Commission recommended that the states “work to

adopt a model confidentiality statute with the goal of eliminating

inconsistencies among state confidentiality agreements.”1 As a leading

state enforcer has pointed out, however, “state confidentiality statutes

raise significant issues beyond antitrust investigations that make passing

a model or uniform state statute unlikely.”2

B. What Qualifies for Confidential Treatment?

The question of what materials are eligible for confidential treatment

has no easy answer. Different types of materials might qualify for

different levels of confidential treatment at different stages of an

investigation or litigation. For example, many state attorneys general

have the authority to issue pre-complaint subpoenas, often called civil

investigative demands (CIDs), during the investigatory stage of an

antitrust case.3 Most CID statutes require that the investigating state treat

1. ANTITRUST MODERNIZATION COM M’N, REPORT AND RECOMMENDATIONS

203 (2007) (Recommendation 36c).

2 Robert L. Hubbard, The Antitrust Modernization Commission and the

States, ANTITRUST, Summer 2007, at 34.

3. See ALA. CODE § 8-19-9; ALASKA STAT. § 45.50.592; ARIZ. REV. STAT.

§ 44-1406; ARK. CODE ANN. § 4-88-111; CAL. GOV’T CODE § 11181(e);

COLO. REV. STAT. § 6-4-110; CONN. GEN. STAT. § 35-42; DEL. CODE

ANN. tit. 6, § 2106; D.C. CODE § 28-4505; FLA. STAT. § 542.28; GA.

CODE ANN. § 10-1-403; HAW. REV. STAT. § 480-18; IDAHO CODE ANN.

§ 48-109; 740 ILL. COMP. STAT. 10/7.2; IND. CODE § 4-6-3-3; IOWA CODE

§ 553.9; KAN. STAT. ANN. § 50-153; KY. REV. STAT. ANN. § 367.240; LA.

REV. STAT. ANN. § 51.1411; ME. STAT. tit. 10, § 1107; MD. CODE ANN.,

COM. LAW § 11-205; MASS. ANN. LAWS ch. 93, § 8; MICH. COMP. LAWS

§ 445.776; MINN. STAT. § 8.31; MISS. CODE ANN. § 75-24-27; MO. REV.

STAT. § 416.091; MONT. CODE ANN. § 30-14-221; NEB. REV. STAT. § 59-

1611; NEV. REV. STAT. § 598A.100; N.H. REV. STAT. ANN. § 356:10; N.J.

STAT. ANN. § 56:9.9; N.M. STAT. ANN. § 57-1-5; N.Y. GEN. BUS. LAW

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all materials obtained under a CID as confidential during the

investigation.4 Some have penalties for unauthorized disclosure.5 In

some states, confidential status is not automatically bestowed on all

materials obtained through pre-complaint compulsory process; rather, the

producing party is given the option of designating certain materials as

confidential at the time of production.6 These states require adva nce

notice to producing parties of intended disclosure by the attorney general

but split on whether the producing party must seek a protective order to

prevent or limit the intended disclosure7 or whether the state bears the

burden of seeking an order to authorize the disclosure.8 Different rules

apply when the investigation ends and the parties go to litigation.

Moreover, as discussed below, certain types of materials receive an

extra layer of confidentiality protection by statute or by practice simply

by virtue of their status or content.

§ 343; N.C. GEN. STAT. § 75-10; N.D. CENT. CODE § 51-08.1-06; OHIO

REV. CODE ANN. § 1331.16; OKLA. STAT. tit. 79, § 210(B); OR. REV.

STAT. § 646.750; R.I. GEN. LAWS § 6-36-9(B); S.C. CODE ANN. § 39-5-

70; S.D. CODIFIED LAWS § 37-1-11.1; TENN. CODE ANN. § 8-6-402; TEX.

BUS. & COM. CODE ANN. § 15.10(B); UTAH CODE ANN. § 76-10-917; VT.

STAT. ANN. tit. 63, § 2460; VA. CODE ANN. § 59.1-9.10; WASH. REV.

CODE § 19.86.110; W. VA. CODE § 47-18-7; WIS. STAT. § 133.11; WYO.

STAT. ANN. § 40-12-112. Most CID statutes are contained within states’

antitrust statutes. Exceptions include California, Georgia, Indiana,

Pennsylvania, and T ennessee.

4. See, e.g., ARIZ. REV. STAT. § 44-1406(E) (providing that material

produced pursuant to CID statute is confidential unless confidentiality is

waived or unless provided otherwise by court order); MASS. ANN. LAWS

ch. 93, § 8 (requiring materials be kept confidential except as necessary in

the context of litigation); MISS. CODE ANN. § 75-24-27(2) (prohibiting

disclosure to third parties without consent of producing party).

5. See, e.g., D.C. CODE § 28-4505(1) (provid ing that intentiona l

unauthorized discl osure is a misdemea nor punishable by a fi ne of up to

$500); OHIO REV. CODE ANN. § 1331.99(B) (providing that breach of

confidentiality is a misdemeanor of the first degree).

6. See, e.g., OKLA. STAT. tit. 79, § 210(G); WIS. STAT. § 133.13(2).

7. See, e.g., WIS. STAT. § 133.13(2) (permitting producing party to seek

court order to limit or prohibit disclosure).

8. See, e.g., OKLA. STAT. tit. 79, § 210(G)(1) (permitting attor ney general to

petition court for order allowing disclosure of trade secrets or confidential

information).